Know where your business stands, with a cash flow forecast
COVID-19 brought business revenues to an abrupt halt for many companies. Now more than ever it is critical that businesses manage their cash flow effectively. In this guide, we explain how to improve your cash flow position by creating a cash flow forecast.
A cash flow forecast is critical for businesses who are still in lockdown or preparing to go back to work. You should consider:
- What would happen if you lost your biggest customer?
- How long would cash reserves last if your revenues decreased by 10%, 20%, 30%, 40% as you return to business?
- At what point will your business be in danger of running out of cash?
- How do you need to adjust your costs in order to make your cash last longer?
This template has been built in partnership with FreeAgent, award-winning* online accounting software available free to NatWest business current account customers. *Most Outstanding Accounting Software of the Year, SME News Business Elite, 2019
This document is a forecasting guide for illustrative purposes only and VAT amounts are purely indicative. None of the content should be construed as advice on tax or financial matters.
We have listed some of the options that might be available to you below, but please remember this is not advice or a recommendation of any kind and there may be other options available to you and so it is important that you do your own independent research. You can refer to your own accountant, or if you don't already have an advisor, eligible FreeAgent customers can find an accountant to work with directly within their account.
How to create a cash flow forecast
Use our simple Excel template to help you populate your cash flow. Guidance is provided within each tab but here is an overview of what you will need to do.
Have you identified potential issues with your cash flow in the near future?
The government has introduced a number of schemes to support businesses through the coronavirus crisis. Check what you are eligible for here.
Pay It Forward by Crowdfunder is a donation and reward-based service. It allows you to generate funds for your business without releasing equity. £5m has been raised so far across 1.5k businesses.
FreeAgent is the small business accounting software that does it all. Manage expenses, fire off an invoice, check your cash flow and stay on top of your taxes on the go. It’s also completely free for NatWest business current account customers.
Some helpful links:
Free financial management digital learning modules with Business Builder
Register with Business Builder for free digital learning modules. Our financial management section helps you build a P&L statement, calculate profit margins and details other key financial metrics. Plus, more tips for managing your finances.
Related guidance and support you may find useful
Get your business moving again
Tips, suggestions and services to help your business get back on track. Plan for exiting lockdown, ending staff furlough and rebuilding business resilience.
Helping your business through coronavirus
Whether you're in need of immediate support, getting back on your feet, or your business is growing - we have a range of tools and resources to help.
Webinars to support your business
Register for upcoming live webinars, or watch previous sessions. Our experts discuss ways to deal with the impact of coronavirus on your business.